How DC220 built a high-margin storage line on Exaba LocalScaler

DC220 is New Zealand’s most connected data centre. By adding Exaba LocalScaler to its facility, DC220 and the MSPs it hosts can stand up sovereign, S3-compatible object storage on their own terms, turning connectivity and floor space into a new, high-margin recurring revenue stream, without the capital cost or engineering overhead that usually comes with building a private cloud.

AJ Tills, Exaba Chief Customer Officer, sat down with CEO Ross Delaney to talk about data, storage, sovereignty and what it means to run New Zealand’s most connected data centre.

THE CONNECTED HUB

Walk into DC220 and you are standing in one of the country’s default gateways. It operates as a hyper-connected edge data centre: a neutral, densely connected facility where networks come to meet each other. 97 peering options with six internet exchanges on site. Data moves efficiently here because everyone is already there.

Three primary customer groups reside at DC220: Network providers who want a neutral home. MSPs who run their operations. And global technology brands establishing a local NZ presence. 

Which raises an obvious question: how does Exaba LocalScaler help customers in DC220 store and move data inside and outside of New Zealand?

THE OPPORTUNITY

For the MSPs operating inside DC220, storage is the easiest service in the world to sell and one of the hardest to build.

Cloud platforms can demand heavy capital up front or expensive leasing options, and on top of that multi-tenanted environments are notoriously fiddly to engineer, and every new tenant has historically meant another round of manual configuration.  This is typically slow, expensive and stressful, done by the most senior engineer on the team with tight deadlines.

Meanwhile storage demand is surging. Sovereign, onshore storage and serious data protection went from a nice-to-have request to a standing expectation and MSPs needed a way to answer that profitably, fast and without betting the balance sheet on hardware or hiring a huge team to run it.

“We fund the foundation that lets MSPs build on top.” Ross Delaney, CEO Datacentre220

THE SOLUTION: EXABA LOCALSCALER

Exaba LocalScaler offers a different path, and it comes down to 3 design decisions.

• Hardware-agnostic. Operators own and build on the hardware they choose, including second-hand equipment, so initial investment stays low and the platform bends to the balance sheet.
• Multi-tenant and API-led by design. Automation removes the manual configuration that made multi-tenancy painful. Tenants become a routine operation.
• Pay-as-you-go. No large minimum commitments of the kind that come with traditional leasing. Operators pay for what they use as they grow.

ENABLING THE LOCALSCALERS

The hardware behind every LocalScaler belongs to the operator running it, and Exaba’s role stops at the software licence and support. Most operators are MSPs that buy their own hardware and rack it in a data centre of their choice. DC220 chose to become the operator itself, funding the hardware, licensing LocalScaler, and selling a white-labelled service, DC220.E3, to the MSPs on its floor. Those MSPs carry no hardware cost and hold no licence. They buy capacity by the terabyte and sell storage to their own customers under their own brand.

• Exaba supplies the LocalScaler software, the licence and the tier 3 support. No hardware, no racks, no end-customer contracts.
• The operator owns the hardware and holds the licence. Usually an MSP. At DC220, the data centre took the role itself.
• The MSP sells storage to its customers under its own brand, on hardware it owns or capacity it buys from an operator.

A SERVICE YOU CAN ACTUALLY SELL AT A MARGIN

With Exaba LocalScaler, an MSP can provision object storage for an end customer in as little as an hour. A slow, capital-heavy build becomes a fast, repeatable service. The kind you can quote on a Tuesday and deliver on a Wednesday.

Because the platform automates multi-tenancy, MSPs can grow the number of tenants and the volume they store without adding headcount. Technical teams get their time back and spend it on innovation and customer value instead of task-based configuration.

Combine that with low hardware costs and pay-as-you-go economics and storage becomes a genuinely high-margin offering (while still being price competitive), which matters in a tight economy where every service has to earn its keep.

“With Exaba an MSP at DC220 can stand up sovereign object storage for a customer in less than an hour, on wholesale hardware, and sell it at a margin that actually makes sense.” Ross Delaney, CEO Datacentre220

SOVEREIGNTY, SECURITY AND GOVERNANCE

Exaba LocalScaler also lets DC220 lead with the themes its market cares about most.

Data sovereignty (keeping data onshore, managed by local people, governed by local law) has become a board-level concern that everyone is now aware of. Much of that urgency now comes from a newer worry: organisations do not want their proprietary intellectual property quietly absorbed into someone else’s AI model.

Encryption is built into the platform instead of being bolted on through third-party add-ons, and immutability is supported natively (an increasingly essential defence given the frequency of global breaches). MSPs are using it to create affordable, encrypted local copies of customer data: a robust addition to backup strategies that until now leaned on a single copy sitting in a public cloud.

“Sovereignty is now a board-level priority, and Exaba lets us answer it locally, on infrastructure we control.” Ross Delaney, CEO Datacentre220

UNLEASHING MSPs TO MAKE NZ MORE RESILIENT

Change the economics and you change what MSPs can help customers do with their data.

MSPs no longer have to foot the bill for a minimum of a $500,000 buy-in to start to offer resilient backup storage to customers, and can now help secure New Zealand companies with reductions of at least 80% against public cloud alternatives. At that price, MSPs can now help businesses affordably retain up to seven years of history on high-quality hardware for a fraction of the cost.

The role that a data centre like DC220 can now play in working to enable MSPs is powerful, as the data centre can ease the cost of setup, leveraging rack space, power and infrastructure that the data centre provides.  This new model is unleashing MSPs in the NZ market.

THE ROAD AHEAD

Delaney advocates a hybrid approach: the right cloud for the right reasons. Exaba LocalScaler’s API-led design makes that straightforward, sitting alongside hyperscale services rather than replacing them outright.

For Exaba, the partnership points at the wider trajectory: expanding into the United States while keeping its roots in New Zealand, and relationships like DC220’s at the core of the global rollout.

ABOUT EXABA

Exaba is a sovereign, S3-compatible storage company, enabling Managed Service Providers to deliver cloud storage on their own terms. Its LocalScaler platform lets MSPs and data centre partners run object storage on hardware they control, or on capacity from a partner who does, keeping data in their customers’ jurisdiction and the margins in their business.